The Central Bank of Kazakhstan plans to examine the potential benefits and risks of adopting a state-backed digital currency.
The Central Bank of Kazakhstan (NBRK) released a report on the pilot project for CBDC, in a statement on May 5. According to the report, the bank has launched a public consultation on a potential central bank digital currency (CBDC).Also, the report cites the main reason for the CBDC issuance objectives as further development of the national payment system and reduction of cash payment dependency using unique technical features. The central bank also stressed that CBDC is not intended to replace cash or cashless payments, but instead will be an alternative that is used in parallel with existing payment solutions.NBRK stated that digital money will increase competitiveness in the payment market, strengthen the stability of the financial system, and also contribute to increasing public confidence in state-sponsored payments:
“The technology will meet the highest cyber security standards. It will also pay special attention to consumer protection and the privacy of CBDC users. “
A comprehensive study on the benefits and risks associated with a potential CBDC will take the first place among the work to be done in this context. In collaboration with financial market players and global partners, NBRK also plans to define the goals of the digital currency, the methods of issuance and distribution, the technology and monetary policy applied, financial stability and its potential impact on the payment ecosystem.
As will be remembered, Kazakhstan officials initially announced that the government began considering a national digital currency in July 2020, alongside plans to increase investment in cryptocurrency mining.Local officials also pointed out that the digital currency has the potential to become a very important tool in the fight against corruption in Kazakhstan.